Apple’s ad privacy change affects most industries

The impact of Apple’s privacy change at the beginning of this year will soon appear on companies’ balance sheets.

In April, Apple delivered an update for iPhones enabling users to choose if they want to allow apps to target them for ads. After that, iPhone users could easily avoid ads by tapping an Ask App Not to Track button.

Six months later it has became evident that most iPhone users chose to avoid ads, and the ATT (App Tracking Transparency) feature is now presenting challenges to most companies, including Facebook, Snap, and Peloton. 

The privacy feature turned the behind-the-scenes mechanics of mobile ads upside down, especially those that confirm a purchase or download.

Last month, Facebook’s parent company suggested that the new feature made its ads less effective. Facebook said its revenue would have grown considerably in the previous quarter if not for the ad changes from Apple. Instead of increasing, it stayed flat.

Last month, Snap’s stock experienced a hit, blaming Apple’s privacy changes. Its CEO Evan Spiegel said that this feature would further pose risks to its fourth-quarter earnings. The company said that holiday-quarter sales would be about $1.19 billion, which seems significantly lower than Wall Street expected at the $1.37 billion in sales.

Other companies affected by the feature

Last month, Peloton also said that Apple’s privacy feature cut user growth.

Earlier this week, Apple CEO Tim Cook refused to comment on the privacy feature’s impact on different companies. However, he said that ATT was released to allow users to choose what happens on their mobile devices. 

Cook said that the idea of this feature was to give power to the user. He clarified that what they do is just give them a chance to choose instead of making the decision for users. He also said that if people choose not to be tracked across apps is not Apple’s fault.

In fact, 62% of iPhone owners choose not to be tracked.

It took a couple of months before companies and advertisers began to experience the full effects of Apple’s privacy changes after most iPhone owners updated their smartphones.

The update divided users into two categories, where the majority decided against tracking. 

Facebook has reacted by creating its systems inside the apps, like buying products right away from Facebook, without third-party tracking. After Apple’s privacy changes, Mark Zuckerberg said that Facebook would allow big businesses to set up shop inside apps.